Thursday, April 20, 2006

Not a Healthy Market Yet....

"In a healthy market, the home appreciation rate should be just a little bit ahead of inflation."

"Real estate historically has been a good hedge against inflation but not to the point where it is being appreciated 5 to 10 times the amount of inflation."

"From 2001 to 2005, the annual rate of inflation in the Bay Area averaged 1.6 percent, according to the federal Bureau of Labor Statistics."

"During the same five-year period, the median price of a Bay Area home went from $387,000 to $609,000."

"Bay Area home values rose at a slower rate in March, with home sales declining again on a year-to-year basis, DataQuick Information Systems reported Wednesday."

"It looks as if Bay Area homeowners can say so long to home prices growing by double digits. The latest monthly figures show year-to-year price appreciation falling into single digits and prices flattening out overall. In a slowing market, home sales decline before price appreciation softens, according to economists."

"March was the 12th straight month that home sales declined on a year-to-year basis.Sales dropped 13.8 percent last month to 9,745 new or resale houses or condominiums, from 11,310 in March 2005."

"Homes sales are traditionally slower in January and February. That is why March is viewed as a better gauge for upcoming sales."

"Steve Dhillon, Realtor at Fremont-based ERA, The Property Professionals, said the slowdown in appreciation was to be expected."

'"Most economists or housing experts were predicting that by the end of the year, it would slow down. The high-end market has definitely slowed down, appreciation tends to be higher in areas that are more affordable" he said."

"We feel the data is pretty clear that sales volumes are starting to decline," said Leamer, director of UCLA Anderson Forecast, which issues quarterly economic projections for California. "That's the early warning sign that the housing market is turning."

2 Comments:

gosh and i though prices would appreciate 10% like the nar said who is this guy leamer? doesn't he realize that greater suppy and decreasing demand equal higher prices? think of all those chinese billionaires lusting after tract houses in the bay area!!! and luxury condo's too!!!time for that guy to join rotary and get his attitude right.